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You purchase 100 shares of Awesomely Disruptive NewCo at $60. The initial margin requirement (IMR) is 50%, and you borrow the remainder at an interest
You purchase 100 shares of "Awesomely Disruptive NewCo" at $60. The initial margin requirement (IMR) is 50%, and you borrow the remainder at an interest rate of 8% per year from your broker to purchase the shares. The maintenance margin requirement (MMR) is 30%.
If the stock price drops to $40 in one year, how much money remains in your margin account? Do you get a margin call? If yes, how much cash do you have to put up to restore the IMR?
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